Foxconn's Buyout of Sharp
According to market watchers, Foxconn’s buyout of Sharp can be a sign of another nerve war between two rivals – Samsung Electronics and Apple.
The Wall Street Journal (WSJ) reported on March 31, “Foxconn is seeking to break into the OLED market through the acquisition of Sharp.” It also expected another strain on relations between Apple, which is considering using OLED displays in the next-generation iPhones, and Samsung, which dominates the global OLED display market.
An OLED, or organic light-emitting diode, is a light-emitting diode (LED) in which the emissive electroluminescent layer is a film of organic compound that emits light in response to an electric current. By responding 1000 times faster than equivalent LCD devices, an OLED screen produces no afterimage effects when showing moving images. Also, an OLED display works without a backlight; thus, it can make the thickness of smartphones much thinner and curved.
The WSJ said, “Samsung currently makes more than 95% of the world's supply of OLED displays, according to Beijing-based research firm Sigma Intell.”
It also reported that officials, who are familiar with Apple’s product roadmap, said Apple is considering the plan to apply the OLED screen in the iPhone early next year since it needs an innovative model in order to pull the growth in the iPhone sales regardless of the global economic recession.
Industry sources forecasted that Samsung and LG, which have been making large-scale investments in their OLED production lines, will benefit when Apple equips the next iPhone models with OLED displays. However, things are changing as Foxconn sealed the takeover of Sharp and publicly announced to begin the development of OLED screens.
Although Sharp hasn’t developed an OLED display yet, it is expected to succeed in developing OLEDs with the current LCD panel production lines and display technologies.
In particular, Apple, which is in a tough competition with Samsung for the global smartphone market share, doesn’t seem to be depending on Samsung for the supply of OLED displays for the iPhones, said the WSJ.
Apple is known for its clever management of component suppliers. In a bid to prevent a short supply and price drops, the company has a wide array of suppliers for each component. Japan Display Inc. (JDI), Sharp and LG Display have been main iPhone display suppliers.
Previously, Chinese IT media outlet Weifeng.com reported that Apple is hiring OLED display experts and is likely to develop OLED screens itself.